Sample Disclosure – Revenue Recognition Policy For Sale Of Goods (6 May 2011)

Revenue recognition

Revenue from sale of goods is measured at fair value of the consideration received or receivable and is recognised in the statement of comprehensive income of the Company when significant risks and rewards of the ownership of the goods have been transferred to the buyers.

Sample Disclosure – Note On Effect Of Adopting FRS 7 Financial Instruments: Disclosures (5 April 2011)

Prior to 1 January 2010, information about financial instruments was disclosed in accordance with the requirements of FRS 132 Financial Instruments: Disclosure and Presentation. The Group and the Company adopted FRS 7 Financial Instruments: Disclosures (“FRS 7”) as at 1 January 2010. FRS 7 introduces new disclosures to improve on the level of disclosure of information about financial instruments. It requires the disclosure of qualitative and quantitative information about exposure to risks arising from financial instruments, including specified minimum disclosures about credit risk, liquidity risk and market risk, including sensitivity analysis to market risk.

The Group and the Company have applied FRS 7 prospectively in accordance with the transitional provisions of FRS 7 and therefore, the comparatives have not been applied with the requirement of new disclosures under FRS 7. The new disclosures are included throughout the Group’s and the Company’s financial statements for the year ended 31 December 2010.

Sample Disclosure – Accounting Policy Of Operating Segments Reporting (17 March 2011)

Operating Segments

In the previous financial years, the Group deemed a segment as a distinguishable component of the Group that was engaged either in providing products or services (business segment), or in providing products or services within a particular economic environment (geographical segment) which was subject to risks and rewards that were different from those of other segments.

Following the adoption of FRS 8 Operating Segments, an operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. An operating segment’s operating results are reviewed regularly by the Chief Operating Officer (CEO), acting as the chief operating decisions maker of the Group. The CEO makes decisions about resources to be allocated to a segment of the Group, and assesses its performances, for which discrete financial information is available for him/her to make the decisions.

However, as the Group have remained dormant, the adoption of FRS 8 Operating Segments does not have any impact to the presentations and disclosures required to be made in the financial statements.

Sample Disclosure – Note On Significant Event During The Year On Lifting Of PN 17 Status (9 March 2011)

Note On Significant Event During The Year – Lifting Of PN 17 Status

The Company had previously announced on 8 April 2008 that it intended to undertake a regularisation scheme to address its status under the Amended Practice Note 17/2005 of the Listing Requirements issued by Bursa Malaysia Securities Berhad (“PN 17”). The regularisation scheme was approved by the shareholders of the Company at the Extraordinary Meeting held on 8 June 2009.

As part of the regularisation scheme, order from the High Court confirming the par value reduction of the ordinary shares of the Company pursuant to the requirements of Section 64 of the Companies Act, 1965 was obtained on 8 July 2009.

The regularisation scheme was completed on 8 September 2009 followed by the lifting of the PN 17 status of the Company by Bursa Malaysia Securities Berhad on 15 September 2009.

The details of the regularisation scheme are as follows:-

  • A total of RMX,XXX,XXX nominal Redeemable Convertible Unsecured Loan Stocks – A (“RCULS-A”) were issued on 1 August 2009 from its renounceable rights issue. The RCULS-A were subsequently  converted on 7 September 2009 into XX,XXX,XXX new ordinary shares of RM0.25 each at the conversion rate of five ordinary shares of RM0.25 each for RM1 nominal value of RCULS-A held.
  • A total of RM175 million ordinary shares of RM0.25 each (the “DEF Consideration Shares”) and 43.75 million nominal value of 3% Redeemable Convertible Unsecured Loan Stocks – B (“RCULS-B”) were issued on 7 September 2009 respectively as consideration for the acquisition of 100% equity interest in DEF Sdn. Bhd.. The DEF Consideration Shares were subsequently listed and quoted on Bursa Malaysia with effect from 8 September 2009.
  • The issued and fully paid-up share capital upon the completion of the regularisation scheme on 8 September 2009 stood at XXX,XXX,XXX ordinary shares of RM0.25 each totalling RMXX,XXX,XXX.

Sample Disclosure – Note On Realised And Unrealised Profits (25 February 2011)

Realised and Unrealised Profits

On 25 March 2010, Bursa Malaysia Securities Berhad (“Bursa Malaysia”) issued a directive to all listed issuers pursuant to Paragraphs 2.06 and 2.23 of Bursa Malaysia Main Market Listing Requirements. The directive requires all listed issuers to disclose the breakdown of the retained profits or accumulated losses as at the end of the reporting period, into realised and unrealised profits or losses.

On 20 December 2010, Bursa Malaysia further issued guidance on the disclosure and the format required.

The breakdown of retained profits of the Group and of the Company as at the reporting date, into realised and unrealised profits, pursuant to the directive, is as follows:

The determination of realised and unrealised profits is based on the Guidance of Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosures Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by the Malaysian Institute of Accountants on 20 December 2010.

Accordingly, the unrealised retained profits of the Group and of the Company as disclosed above excludes translation gains and losses on monetary items denominated in a currency other than the functional currency and foreign exchange contracts, as these gains and losses are incurred in the ordinary course of business of the Group and of the Company, and are hence deemed as realised.

The disclosure of realised and unrealised profits above is solely for complying with the disclosure requirements stipulated in the directive of Bursa Malaysia and shall not be applied for any other purposes.

Sample Disclosure – Note On Reserves (17 February 2011)


i.             Share premium arose from the issuance of 10,575,000 shares of RM1.00 each at a premium of RM0.15 per share, net of listing expenses.

ii.            Asset revaluation surplus arose from revaluation of freehold land and buildings and leasehold building in the previous years.

iii.           In accordance with the Finance Act 2007, the single tier income tax system became effective from Year of Assessment 2008. Under this system, tax on profits of companies profit is a final tax, and dividends paid are exempted from tax in the hands of the shareholders. Unlike the previous imputation system, the recipient of the dividend would no longer be able to claim any tax credit.

Companies without Section 108 tax credit balance will automatically move to the single tier tax system on January 1, 2008. However, companies with such tax credits are given an irrevocable option to elect for the single tier tax system and disregard the tax credit or to continue to use the tax credits under Section 108 account to frank the payment of cash dividends on ordinary shares for a period of 6 years ending December 31, 2013 or until the tax credits are fully utilised, whichever comes first. During the transitional period, any tax paid will not be added to the Section 108 account and any tax credits utilised will reduce the tax credit balance. All companies will be in the new system on January 1, 2014.

As of the balance sheet date, the Company has not elected for the irrevocable option to disregard the Section 108 tax credits. Accordingly, subject to the agreement of the Inland Revenue Board and based on the prevailing tax rate applicable to dividend, the Company has sufficient Section 108 tax credit and tax exempt income as mentioned in Note XX to frank approximately RM525,000 of the Company‟s retained earnings as of 31 November 2010 if distributed by way of cash dividends without additional tax liability being incurred. Any dividend paid in excess of this amount during the transitional period will be under the single tier tax system as explained above.